Yusuf Mehdi, senior vice president of Interactive Entertainment at Microsoft and former CBS TV executive Nancy Tellem were interviewed by AllThingsD’s Peter Kafka and this meeting turned out to be special as more details regarding the Microsoft interactive shows came out.

Tellem said that her team of 150 people are looking to produce hit programming that will include live events, reality shows, and scripted programming all with a twist. According to Mehdi, the Xbox started out as a gaming machine, but now the majority of the 76 million users worldwide spend more time viewing entertainment than playing game.

Mehdi described the audience ratios by saying that the user base has been dominated by male. But he said that currently 38% of Xbox users are women and 51% are people with children.

Xbox users spend 87 hours a month on an average engaged with the device. The Xbox accounted for 18 billion hours of entertainment in 2012. But the company also partners with more than 100 media partners, Mehdi said, including Netflix and Hulu.

The challenge for Microsoft creating programming is that the content should be unique so that people will actually pay for it to run on their living rooms.